From Nasdaq:

Investors hoping for imminent rate cuts by the Federal Reserve received a sobering reminder of the U.S. central bank’s focus on fighting inflation, after Chairman Jerome Powell poured cold water on bets policymakers would lower borrowing costs in March.

Stocks and bonds soared last year on expectations the Fed would soon begin cutting rates, but Powell’s wait-and-see approach, a resurgence of worries about the U.S. banking sector, and mixed earnings from tech giants could slow the rally that took the S&P 500 to a record high.

Central bank officials have pushed back against the notion of imminent rate cuts, while the Fed has maintained a strong endorsement of the U.S. economic picture.

Given there were a significant amount of investors expecting a March rate cut, “there are going to be investors who were offsides in their positioning.”

For some bond investors, a delay in a Fed pivot represents an opportunity to take advantage of high-yielding debt before rate cuts materialize.

One area where such a scenario could play out is the banking sector, where concerns re-emerged around the health of U.S. regional lenders after New York Community Bancorp reported a surprise earnings loss and cut its dividend.



Read more: ANALYSIS-Inflation-focused Fed shoots down Wall Street’s hopes of March cut